Performance Management

HR heading for divorce battle over custody of Performance Management

divorceOriginally published by Inside HR 

The opportunity is ripe for HR to broaden its performance management definition and join forces with other performance management system owners within their organisations to establish a complete workforce performance framework, writes Rob Scott

A few years ago, HR functions would have been acknowledged as the custodian and owners of performance management together with the supporting technology. And if you went searching for a new performance management solution, you would struggle to find anything outside the HR technology vendor community.

But many would argue that traditional performance management has been less than successful in improving employee performance and business value over the last 50 years, and at most it was an annual or bi-annual exercise in HR process compliance by line managers and their subordinates. This naturally gave rise to alternate performance management solutions outside the HR framework.

Another trigger for change has been the move to the digital era. Modern technology has allowed the workforce to be increasingly mobile to the extent that jobs and location can be decoupled. The structure and nature of the workplace and workforce are radically transforming while the definition of an employee is largely irrelevant as more and more forms of “peripheral” work engagements are used. Contingent workers, “giggers”, freelancers, autonomous self-directed teams, agency workers, and outsourced/insourced teams are now part of the workforce fabric.

“Performance management can no longer be done in a standardised way, rather it must cater for the specific type of engagement relationship”

Generally the HR function hasn’t included these peripheral workers on their performance management radar, mainly because they are not permanent employees, are not linked to career or succession plans, are often not hired onto the core HR system, the performance process doesn’t cater for short-term activity or teams, or HR has no control or authority over their appointment. Most HR technology vendors have focussed their recent performance management software updates around the shift from rigid annual reviews of goals and objectives to tools that facilitate ongoing communication, coaching and mentoring of permanent employees. What they haven’t done is deal with effective measurement of and feedback to peripheral workers.

But away from HR’s eye’s other software systems, typically owned by operations, finance, marketing or procurement, tools such as Workforce Management (WFM), Contingent Workforce Management (CWM), accounts payable, freelance platforms, industry talent pools, social engagement platforms, social media platforms and others are actively geared to track performance against goals, assess quality, track activity through Internet of Things connectivity, provide team, company or individual feedback, and inform “re-hire” decisions.

Over the next five years, the size of the peripheral workforce will continue its upward trajectory. Analysts generally expect this number to be as high as 40 per cent of the total workforce by 2020. Even today, most new jobs created in Australia are part-time. Irrespective of the employment type, managers still need to focus and align their workforce to achieve their organisational and business specific objectives in the most efficient way.

“Continuity, engagement, feedback, opportunity and development are the collective cornerstone of an employer value proposition”

Performance management can no longer be done in a standardised way, rather it must cater for the specific type of engagement relationship. Some employees will still require traditional cascading-goal performance management, others may need social goal-setting and peer review, while others simply need a star rating and re-hire indicator.

Performance management now has co-ownership. The opportunity is ripe for HR to broaden its performance management definition and join forces with other performance management system owners within their organisations to establish a complete workforce performance framework. Continuity, engagement, feedback, opportunity and development are the collective cornerstone of an employer value proposition – it will be hard to achieve or maintain this if close to half the workforce is not included in a performance framework.

5 key considerations for HR

  • HR departments are no longer the sole custodians of performance management solutions.
  • The shift towards the digital economy has given rise to a new type of workforce which is not bound by time, location or permanency. Their performance management needs are significantly different to permanent full-time employees.
  • Modern operations management, procurement, financial and marketing software solutions cater for relevant forms of performance management and feedback.
  • Organisations need a workforce performance framework which is underpinned by choice and appropriateness rather than a single standardised approach to management of performance.
  • As the contingent labour force increases as a percentage of total workforce, greater urgency is needed to build strong relationships with these teams and individuals through new performance management approaches and tools.